What Next? Lawmakers Look To Undo The Back-up Plan

Monday, November 21, 2011

Donna Cassata, AP

Don't look for the Pentagon to shut down one side of its famous five-sided building. Don't expect the Education Department to pull back its grants just yet.

With the collapse of the deficit-cutting supercommittee, Congress' emergency backup budget-cutting plan now is supposed to take over - automatic, across-the-board spending reductions of roughly $1 trillion from military as well as domestic government programs.

Above: Members of Congress participate in a Joint Deficit Reduction Committee hearing October 26, 2011 in Washington, DC. The special Joint Committee is tasked with finding $1.5 trillion in deficit reduction by Thanksgiving.

But the big federal deficit reductions that are to be triggered by Monday's supercommittee collapse wouldn't kick in until January 2013. And that allows plenty of time for lawmakers to try to rework the cuts or hope that a new post-election cast of characters - possibly a different president - will reverse them.

Congress' defense hawks led the charge Monday, arguing that the debt accord reached by President Barack Obama and congressional Republicans last summer already inflicted enough damage on the military budget. That agreement set in motion some $450 billion in cuts to future Pentagon accounts over the next decade.

The supercommittee's failure to produce a deficit-cutting plan of at least $1.2 trillion after two months of work is supposed to activate the further, automatic cuts, half from domestic programs, half from defense. Combined with the current reductions, the Pentagon would be looking at nearly $1 trillion in cuts to projected spending over 10 years.

Obama declared he would veto any effort to undo the automatic cuts. But there are sure to be efforts in that direction.

"Our military has already contributed nearly half a trillion to deficit reduction. Those who have given us so much have nothing more to give," said House Armed Services Committee Chairman Howard "Buck" McKeon, R-Calif., in promising to introduce legislation to prevent the cuts.

Sens. John McCain of Arizona, the top Republican on the Senate Armed Services Committee, and Lindsey Graham, R-S.C., a member of the panel, said they would "pursue all options" to avoid deeper defense cuts.

The congressional rank and file may be determined to spare defense and undo the automatic cuts, but there's hardly unanimity. Deficit-cutting tea partyers within the GOP side with liberal Democrats in signaling they're ready to allow military reductions. In addition, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., said they would abide by the consequences of the deficit-fighting law - and they control what legislation moves forward.

Freshman Sen. Rand Paul, R-Ky., a tea party favorite, even questioned the legitimacy of the outcry over the military reductions, from Defense Secretary Leon Panetta contending the cuts would be devastating to McKeon's warning that they would "cripple our ability to properly train and equip our force, significantly degrading military readiness."

"I think we need to be honest about it," Paul said in an interview on CNN Sunday. "The interesting thing is there will be no cuts in military spending. This may surprise some people, but there will be no cuts in military spending because we're only cutting proposed increases. If we do nothing, military spending goes up 23 percent over 10 years. If we sequester the money, it will still go up 16 percent. So spending is still rising under any of these plans."

According to the nonpartisan Congressional Budget Office, the planned Pentagon budget for 2021 would be some $700 billion, an increase over the current level of about $520 billion. The cuts already in the works plus the automatic reductions would trim the projected amount by about $110 billion.

"It's not a decrease in the military budget. It's reducing the increase," said John Isaacs, executive director of Council for a Livable World and Center for Arms Control and Non-Proliferation.

But McCain and Graham have been working on legislation that would undo the automatic defense reductions and instead impose a 5 percent across-the-board reduction in government spending combined with a 10 percent cut in pay for members of Congress.

The Senate resumes work next week on a massive defense bill, a possible candidate for any effort to rework or undo the cuts.

"It's a near certainty they will try to get out from under it," Robert Bixby, executive director of the Concord Coalition, a nonpartisan group advocating fiscal discipline, said of the automatic cuts. "It's equally certain they will damage their credibility if they do so."

The next year-plus plays out in a politically charged atmosphere, with Obama's Republican presidential rivals Mitt Romney and Rick Perry already criticizing the commander in chief for the proposed cuts in defense.

Senate Minority Leader Mitch McConnell, R-Ky., said it was imperative for Obama "to ensure that the defense cuts he insisted upon do not undermine national security" as Panetta has warned.

Congressional Republicans and Democrats must also decide in the coming weeks whether to extend unemployment benefits for the long-term jobless and leave in place a payroll tax cut enacted last year to prop up the economy.

One other costly question is whether to fix the Medicare payment formula to prevent a nearly 30 percent cut in reimbursements to doctors.

At the end of 2012, Congress must decide whether to extend the 2001 and 2003 tax cuts enacted under President George W. Bush. Democrats want to allow them to expire for wealthy Americans, Republicans want to extend them.

Under the automatic cuts, the Pentagon would face a 10 percent cut in its $550 billion budget in 2013. On the domestic side, education, agriculture and environmental programs would face cuts of around 8 percent.

The law exempts Social Security, Medicaid and many veterans' benefits and low-income programs. It also limits Medicare to a 2 percent reduction.

"It doesn't begin for 13 months," said Jim Kessler, vice president for policy at the centrist-Democratic group Third Way. "Between now and then is an eternity for Congress."

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